Will I have to pay taxes on this money?

Question

My fiance and I would like to save approximately $40,000 - $50,000 in the next two years to buy our first home and have a financial cushion. We will be placing the money in a savings account. Will we have to pay taxes on this money? If so how much & how is it determined? I know for things such as financial aid and filing income tax returns they always ask how much do you have saved. Why? Can I be disqualified for financial aid because of the savings even though its for a home?

Answer 1

You only pay taxes on the interest accrued on the principal(40-60,000 dollars). I.R.S. does not touch your savings.
By the way-why don't you put your money in a money market?They pay a higher interest rate)

Answer 2

You'll pay tax on any interest you make on the money in the savings account, but not on the money just sitting there except when you initially earn it before you save it.

Financial aid rules for school can require that you use a certain amount of your assets for school, so it can affect your student aid eligibility.

Answer 3

You would be better off putting your money in an IRA account at the bank ,because you do not have to pay taxes on it . It will also grow more quicker in an IRA than in a savings account. The only fee that i know about is ,when you get the money out if it is not used on investments of a home then you would have to pay a fee. Not quit sure of the amount ,it just depends on the amount you get out. Hope that helped you out .

Answer 4

You will have to pay taxes on the interest that your saving accounts make. It is hardly anything but Uncle Sam has to have his hand on everything. It shouldn't make a difference on you financioal aid because it goes off what you make. Good luck and you are making a great decission on saving up for your first home. GOOD LUCK!!

Hope this helps!

Answer 5

You pay taxes on the interest that you make. Interest income is added to your gross wages to determine your taxable income. I can not tell you what your taxes are because it depends on your martial status, the wages that you earn at work, the interest rate for your savings account, do you have any IRA deductions or 401k distibutions taken out of your pay. People pay income taxes on most of their income that they received worldwide. Do not forget state taxes as well.

Answer 6

oftentimes going on healthcare does artwork and this is quite stable in Europe and their device does artwork and is working. As one with relatives there, i know firsthand....Our government ought to relatively set up oftentimes going on shelter US and no exchange in taxes. The senators and lawmakers might desire to might desire to take pay decrease....and then that could help too. Lawmakers (Senators) have freee healthcare on a similar time as elected and after and great salaries...they do no longer go through wehy might desire to working type......And as for Europe and their care the service and care is lots bigger and people are much less ill and have much less probalems...very few have dentures because of the fact of lined dental care, additionally they take much less drugs and inspect healthcare and different issues a lot greater progressed than US. I definitely have been there and checked for myself with acquaintances and relatives. for each guy or woman bashing Europe and Canada wellness sytem, particular, they watch for appointments yet no longer than we do right here.....they have ER's that artwork. maximum docs listed right here are booked up 3-6 weeks and that they love handing our prescriptions for each thing......possibly we would be greater suitable off if we didnt take all this medicine. undergo in suggestions once you're taking that hypersensitivity medicine, then you might desire to take yet another and yet another to wrestle the terrible facet effects and subsequently the pharmecutical companies proceed to make money. whilst i became youthful (in the past) we didnt take all this medicine and we are have been advantageous....